The Indian livestock feed market, which is majorly dependent on the demand from poultry business, is headed for fairly tricky periods for atleast the following three months, as demand stays lukewarm and very poor liquidity is very likely to affect farmers’ capacity to fulfil payment obligations.
According to Amit Saraogi, Taking care of Director, Anmol Feeds, the domestic livestock feed market, which includes cattle, poultry and fish feed among some others, is believed to be shut to ₹2.five lakh crore. Poultry accounts for almost thirty-35 per cent (roughly ₹87,five hundred crore) of the complete animal feed market in India.
“Poultry price ranges had been ruling firm and the demand seemed fantastic. Even so, submit the second 7 days of February there had been rumours on social media linking chicken and egg intake to coronavirus. This impacted the demand and led to a value crash,” Saraogi told BusinessLine.
The value crash arrived at a time when the business was witnessing a better output. Because the poultry sector was performing nicely in the previous 1-2 a long time, folks went in for better placement of birds this calendar year expecting a fantastic demand throughout the Holi time. Output elevated by roughly about 15-twenty per cent this calendar year as opposed to the very last. This more impacted price ranges.
“During Holi time, from March six-15, farmers had to basically offer birds for totally free. This had a direct affect on animal feed,” explained Saraogi.
Because farmers and integrators have not been capable to make any dollars, this has impacted their cash flows severely.
The following three months are very likely to be really hard for the complete livestock and animal feed business on account of very poor liquidity.
“The primary challenge now is that of liquidity…..the farmer has no dollars, neither does the integrator. Regardless of what dollars for feed brands is there with farmers, they are not able to fork out that for the reason that of the enormous losses in the poultry sector. We do not know how the cash flows will enhance,” he pointed out.
Price tag hike
In addition, the price ranges of raw resources, principally soyameal, have long gone up by almost ten-15 per cent in the very last 7 days or so. This could be for the reason that fewer plants are operational and there is a limited supply. Even though any hike in raw substance price ranges is normally passed on to buyers — in this case, farmers — on the other hand, the present-day condition makes it tricky to pass on the value hike.
“So the feed business is suffering for the reason that we are unable to pass on elevated fees, the logistics charge and raw substance charge has long gone up,” he explained.